Retailers Stunned By Fed's Final 'Swipe Fee' Decision

The way retailers see it, what the Federal Reserve giveth, the Federal Reserve taketh away.

It has to do with the debit card interchange fee that Congress required to be set at a lower rate, under last year's financial reform legislation. In December, the Fed set the rate at 12 cents per transaction, down from 44 cents.

The banks protested but retailers cheered. They cheered again a few weeks ago when the Senate turned back an attempt by bank lobbyists to delay implementation of the new swipe fee.

But in a move that seemed to take both banks and retailers by surprise, the Fed has set the swipe fee at 21 cents, not 12 cents.

“It is beyond disappointing that after fighting for months to bring fairness and transparency to debit card swipe fees in order to give hard-working Americans a much-needed break, the Fed has given in to the pandering of Wall Street,” said Dennis Lane, 7-Eleven Franchisee and National Spokesman for Reform Swipe Fees NOW.

“Today’s final regulations are even more generous than the Fed’s proposed rules, guaranteeing the nation’s biggest banks and credit card companies a more than 400 percent profit per transaction. Take it from someone who works on an average of a one to two percent profit – that is just outrageous!” Lane said.

What does it mean for consumers?

It remains to be seen what, if any, impact this has on consumers. During the debate of the fee, retailers insisted they will pass the savings onto consumers while banks said the lower fees will simply go to retailers' bottom line. Lane served notice the fight isn't over.

“Wall Street should expect that small business owners are going to continue to fight until we see that the relief Congress intended – meaningful reform that will provide important savings to small businesses and consumers across the country that are struggling to make ends meet – is implemented once and for all,” Lane said.

The new fee goes into effect July 21.